Challenger to Watch 2019: Hema

For blurring on and offline commerce

Credit: Hema

Hema is a Chinese supermarket chain that is primarily focused on fresh food. The brand name Hema Xiansheng literally means Mr Hippo (which gives the brand its logo), but is also a play on the phrase "boxed freshness”. Alibaba opened its first Hema store in January 2016 and now has over 100 stores across China.

Hema isn’t just a traditional store. It functions as a thought-leading testbed for the future of retail, driven by Alibaba’s ‘New Retail’ strategy. Its innovative solution to ‘bricks and mortar’ retail seamlessly integrates digital and physical retail, and, if you’re in retail, you should be taking notes.

The key to Hema is mobile. Every product on the shelves at Hema has a barcode which shoppers scan for product information like nutrition, price, customer reviews, and even supply chain information i.e. when it was delivered to the store and its origin. The app also suggests recipes and similar products, and saves the data of previous purchases for easy reordering. You can browse the store, use the app or facial recognition checkout to pay with Alipay and then either take your groceries home with you, or get them delivered within a 3 mile radius inside 30 minutes.

60% of each store’s sales come from online and the stores function as a distribution centre for those orders - Hema employees pick and pack the products from the shelves in reusable bags, which are then sent to the delivery hub via a system of conveyor belts on the ceiling.

But it’s not just about efficiency – Hema stores are experiential too. Chinese shoppers place a great deal of importance in the freshest seafood, so Hema has giant tanks where customers can choose their own catch and send it to the kitchen to be cooked before they leave the store. There’s also a huge restaurant where you can order by app, have your meal cooked fresh and then delivered to your table by a robot waiter.

The key to saving traditional retail is to forget about tradition altogether.

— Alibaba video

Alibaba has created in Hema a retail eco-system that epitomises its vision. As Jack Ma explains in a 2017 shareholders letter“’E-commerce’ is rapidly evolving into ‘New Retail’. The boundary between offline and online commerce disappears as we focus on fulfilling the personalized needs of each customer.”

Chinese consumers are years ahead of the US and Europe when it comes to embracing technology, and Alibaba is the company delivering it. If you want a glimpse into retail’s near-future - it’s happening at Hema.